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Straumann acquires etkon

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Straumann acquires etkon, an emerging leader in CAD/CAM tooth restoration
Posted: March 16, 2007
Straumann acquires etkon, an emerging leader in CAD/CAM tooth restoration

  • Acquisition creates a unique partner in the dental sector offering surgical, restorative and regenerative solutions from bone augmentation to individual-ized crowns and bridges
  • Straumann gains an immediate fast-growing presence in state-of-the art crown and bridge dentistry
  • etkon gains an extensive platform to build internationally and to expand in implant dentistry
  • Purchase consideration of EURO 100 million  


Basel/Gräfelfing, 2 March 2007: Straumann (SWX: STMN), a global leader in implant dentistry and oral tissue regeneration, and etkon, a privately-owned fast-growing company in conventional and implant-based tooth restoration using CAD/CAM technology, have signed an agreement for a friendly, outright acquisition of etkon by Straumann.



Straumann‚s largest acquisition to date

According to the terms of the transaction, the Swiss-based company will pay EURO 77 million up front for 77% of etkon‚s shares. The remainder are expected to be acquired in the near future, bringing the purchase consideration to EURO 100 million. This makes the acquisition the largest in the history of the Straumann Group to date.    



High level of complementarity

Computer-aided design and manufacturing (CAD/CAM) have revolutionized conventional tooth restoration, offering fast, cost efficient, reliable, and esthetic solutions. Straumann already has a growing presence in the CAD-CAM implant prosthetic arena with its individualized titanium and ceramic abutment service CARES, which uses Sirona-based scanning and modelling technology. etkon‚s products, services and customer base complement this perfectly. Until now, Straumann has concentrated exclusively on its dental implant and abutment business supported by innovative oral regenerative products, such as Emdogain and Straumann BoneCeramic. The acquisition now positions the company as a unique Œone-stop-shop‚ in its sector.

 

Explaining the rationale behind the deal, Straumann‚s President and CEO Gilbert Achermann said: „We believe that future success in the tooth restoration industry will be increasingly driven by CAD-CAM prosthetics. etkon gives us an immediate sizeable presence in this area and makes us the only company in the dental sector that offers surgical, restorative and regenerative solutions - from bone augmentation and tissue regeneration, through implants and prosthetics, to individualized crowns and bridges. Our two companies are a superb fit ˆ not just in terms of products and services but also with regard to company culture.‰

 

A user-friendly, cost-effective solution for dental labs and general practitioners

etkon‚s success and tremendous growth are built on its scanning technology and manufacturing expertise using state-of-the-art materials. The company assembles compact laser scanners, which it sells in combination with its proprietary modelling software, to dental laboratories. Cost-efficient and extremely easy to use, the package enables the dental technician to model the tooth restoration on a computer. The data are then sent to centralized production centers, which produce the prosthetic in a range of biocompatible, durable and esthetic materials, including high-performance ceramics such as zerion®, the high-purity zirconium oxide with unparalleled surface quality. etkon‚s range of prosthetic solutions extends from single tooth inlays right up to 14-unit full-arch restorations for either conventional or implant-borne restorations.

 

A global platform for continued dynamic expansion

With just a short history and constraints of scale, the company is still at an early stage in developing implant-based tooth restoration solutions and in penetrating international markets.

 

„Straumann‚s global network and presence give us a unique opportunity to achieve our objective of establishing our business around the world. Straumann also catapults us into a position to become the leader in individualized implant prosthetics. Together, we can offer a significantly larger number of customers and patients the ultimate in implant and prosthetic technology,‰ commented etkon CEO Stephan Holzner.    

 

 

About the deal

The acquisition will be effected through an initial payment of EURO 77 million for 77% of the shares at closure in early March 2007. The acquisition of the remaining 23%, which are held by investment funds, is expected in the near future, bringing the purchase consideration to EURO 100 million.

 

Straumann‚s strong free cash flow and Group liquidity of CHF 172 million at the end of 2006 put the Group in a position to complete the transaction in cash without limiting its flexibility for other strategic initiatives, such as the acquisition of its Japanese distributor in the third quarter of 2007.

 

Owing to the fact that etkon generates lower gross and EBIT margins than Straumann, the acquisition will be dilutive at these margin levels. As a large part of the purchase consideration will be for intangible assets that will be amortized over a period of up to 7 years, the transaction is also expected to be dilutive to earnings per share in 2007 and 2008 in the single-digit range, but accretive to cash earnings per share from 2007 onwards.
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